I keep strips as small as 1" to use in mini log cabin blocks. A friend of mine made some of these and bordered a quilt with them and it's awesome! I keep my scraps all cut into strips and squares of all sizes, sorted by size in plastic boxes and then within each box, I sort by darks and lights. For years I just kept scraps in plastic boxes by color, but not cut at all. Since I cut all my scraps into strips and squares, I've used them so many time for scrappy quilts.

I keep pretty much anything that can be used in a crumb, strip, or other scrappy quilt, down to about an inch in size. When one of the bins is full, I decide if it's something I'm really going to do, and usually the answer is no. Then I box it up and mail it to someone on the board.

mine is 1 1/2" X 1 1/2"
One of my earliest quilts was a postage stamp that I designed. It had 5,620 1 1/2" squares and was tied. It was quite ugly, but a pleasure to sleep under and I loved it.
It's become too worn out to use, so I've put it aside to use as a batt in a double that I make for myself someday.

I'm saving everything at least 1" or larger. Thinking about sorting somewhat by size and shape eventually.

Years ago our guild started collecting 1" squares. They gathered them all in a big garbage bag, which they shook every now and again and when it was full they scooped them up into gallon size zip bags and gave them out as a challenge. The women who completed them called them their 'QUILTS FROM HELL'. I guess because it was lots of work putting the tiny squares together.

Right now I am working on a project where there are a lot of pieces that measure 1.5" x 1.5" and 1.5" x 2.5".

I don't think I have much use for anything much smaller than that.

Our Quilt group in Arizona, keeps every teeney tiny unusable scrap, and thread, when we have enough a member has an outlet with the Humane Society and they use this for filler for their dog beds,

My limit is 1.5 x 1.5. But it changes sometimes to smaller if I just really love it (.75 x 2) for minis. I throw everything in a box and when it gets full - or I'm bored - or making a mini - I sort through and organize by color. I used to put scraps in zip-locks but now I have boxes. I wish sometimes that I would cut things into strips or squares or whatever - but I don't. I might need that extra 1/8" some day! Another case where I think bigger is better. :)

2x2 is my smallest. I do use scraps to stuff thing though.

I save all of my batting scraps to stuff things!